Live data from Hacker News

No, You can't retire rich at 30 if you sell your startup

tonywright.com

41–50 of 221 posts

Re: No, You can't retire rich at 30 if you sell your startup

#41
post #2

...where retiring rich is defined as spending $300,000 annually. I'd personally move somewhere cheaper once my income no longer depended on my location.

> "Let's assume you want to live in a major metro area, send your kids to private school..."

That's his problem. When we moved to this country, my dad had an H1B visa and was making far below what an entry level Google employee is making. Nonetheless we had quite a comfortable life: rented an apartment in a suburb with a good school. Later, my parents (both of them finally rising to market rate) were able to afford a house and send me to college (two years of community college and then transferring to a university) without taking a penny of financial aid.

This isn't just a rant against the OP and this has nothing to do with "fuck you money" (I have my own opinion on it, but I am not qualified to state it). I am sick and tired of the premise that these days a comfortable family life is two six digit incomes. No, you don't need a private school, no you don't need to live in San Francisco or a New York (try a suburb instead, which also solves the "private school" problem), no you don't need a single family home, no you don't need two BMWs. Even if you don't retire, it makes sense to live below your means to have money available for a rainy day.

If you know how to live below your means than even as an employee (looking to make a few hundred thousand from options) you have the chance of earning de-facto "fuck you money": the sum of money which means you no longer have to accept a boring/stifling job just to have a job; the money you need to take the time off to work on a "science project" (a technical project that doesn't have an immediate business model).

Re: No, You can't retire rich at 30 if you sell your startup

#43

Earlier quoted context omitted.

So you'll either be a poor-ish young playboy or a rich old guy? Why does the first option sound more attractive? Of course, fast cars and country clubs are all superficial, but being a miser just so you can die with millions isn't that much better...

You've got the dichotomy disease. There is no need to go to either extreme. You can belong to a country club and still live within your means. You can certainly drive a fast car and live within your means. Fast cars can be bought for well under $10k, especially in California where a fast car can last for thirty years and more without rusting. Most of the stuff on more expensive cars is just bling, or comfort features…

Anybody can buy a fast car, but few can actually afford to maintain it.

A $10K fast car you buy might cost you a good bit of money per year to drive and keep in shape. Especially when it's thirty years old.

That's mostly the reason it's only $10K to begin with (and the fact that the market for impractical cars is not too large).

Re: No, You can't retire rich at 30 if you sell your startup

#44
post #9

As someone who just witnessed two non-founders of a startup that had a recent IPO become wealthy enough to retire -- B.S. You can do it with stock options (even without an IPO). Tony seems to be making a binary argument: it's not guaranteed, so you may as well give up on the idea. Of course I'm doing it for the money. I'm also doing it for other reasons. Did someone die and tell Tony Wright that the world is only com…

I couldn't agree with you more sabat, it isn't an either or scenario. I'm hoping for my first success to just be a springboard into more money making ventures.

Re: No, You can't retire rich at 30 if you sell your startup

#45

Earlier quoted context omitted.

Looks like it's time to recommend The Millionaire Next Door : http://www.amazon.com/Millionaire-Next-Door-Thomas-Stanley/d... Don't bother to buy it: Get it out of the library and skim it. It's not a difficult read and it belabors its own point a bit. My own summary: The secret to retaining a high net worth is the same as the secret to accumulating it: Control spending. Don't waste money. Most of the people you know…

So you'll either be a poor-ish young playboy or a rich old guy? Why does the first option sound more attractive? Of course, fast cars and country clubs are all superficial, but being a miser just so you can die with millions isn't that much better...

As others have pointed out, with the buyout presented in the article, you can live forever spending low six figures (like $120k, with inflation adjustments.) That's not "rich young playboy" territory, but it's not "miser" territory either. At that level, you can raise a family in a comfortable house in a nice neighborhood, drive a nice car, have an RV or a boat or a cabin in the woods, have a country club membership and season tickets for your favorite sports team.

Or you can live a little bit cheaper, still doing most of that stuff but maybe skipping out on the country club membership or something, and become a rich old guy who can leave a huge estate to his kids... and still not be a miser.

The key is to position yourself in that middle ground.

Re: No, You can't retire rich at 30 if you sell your startup

#46

Earlier quoted context omitted.

I have similar ideas. I've gathered that Buenos Aires is nice, incidentally.

I'm not a fan of Buenos Aires personally, but you can visit there for cheap :) . (I live in Montevideo, Uruguay which is quite close to Buenos Aires)

Why not BA? Curious why you say that.

Re: No, You can't retire rich at 30 if you sell your startup

#47
post #37

Can we conclude that this is the wistful daydream equivalent of the "Maserati Problem"[1]? I can definitely say that if 30 years we're looking at half a million dollars as a "cost of living adjustment", that world will for the people who don't make that kind of money be Thunderdome. I mean wages have barely kept up with inflation. In the last 40 years (between 1967 and 2007), median wages have only gone up US$10000 (…

Tony's calculations are wrong because he assumed constant inflation. There will be periods of deflation, and many think that one is starting now. It also won't be the last.

It's not a terrible thing to do though, because it also reflects uncertainty in your income, albeit in a way that people aren't used to seeing. There is a non-zero chance that 10 million dollars today will end up being 3 million dollars next year, and I don't mean "next year" metaphorically, and I'm not even talking about the nastiness of the current economy, either; that's always true, regardless of the state of the economy, just the odds change.

Re: No, You can't retire rich at 30 if you sell your startup

#48
post #2

...where retiring rich is defined as spending $300,000 annually. I'd personally move somewhere cheaper once my income no longer depended on my location.

Yeah, I'm not getting where that number comes from. (And I love the suggestion that it's merely "upper middle class".) Personally, I can live a pretty nice lifestyle on "only" a couple thousand in disposable income a month. I really can't imagine what I would do with $20-25,000 / month to spend. With that in mind, I tried a few numbers in the spreadsheet. Just to be more "realistic" I dropped the payday back down to…

I seriously don't mean this in an insulting/trollish way but I think you are either lacking imagination or underestimating how quickly you can adapt to a richer lifestyle. Given you are even here and thinking about entrepreneurial rewards I'd guess the latter. On the other hand perhaps I underestimate how... modest you like to live?

Whilst I also raised my eyebrows at "upper middle class", I know people in that range who have spent rather too much and fallen (not totally) in only a handful of years. They never seemed stupid or excessive. It's probably partly to do with expectations: exactly the bias this article tries to correct.

Re: No, You can't retire rich at 30 if you sell your startup

#49
post #2

...where retiring rich is defined as spending $300,000 annually. I'd personally move somewhere cheaper once my income no longer depended on my location.

Yeah, I'm not getting where that number comes from. (And I love the suggestion that it's merely "upper middle class".) Personally, I can live a pretty nice lifestyle on "only" a couple thousand in disposable income a month. I really can't imagine what I would do with $20-25,000 / month to spend. With that in mind, I tried a few numbers in the spreadsheet. Just to be more "realistic" I dropped the payday back down to…

Also, perhaps you are young and naive like me and don't think about the real cost of kids ;)

Re: No, You can't retire rich at 30 if you sell your startup

#50

Earlier quoted context omitted.

Looks like it's time to recommend The Millionaire Next Door : http://www.amazon.com/Millionaire-Next-Door-Thomas-Stanley/d... Don't bother to buy it: Get it out of the library and skim it. It's not a difficult read and it belabors its own point a bit. My own summary: The secret to retaining a high net worth is the same as the secret to accumulating it: Control spending. Don't waste money. Most of the people you know…

So you'll either be a poor-ish young playboy or a rich old guy? Why does the first option sound more attractive? Of course, fast cars and country clubs are all superficial, but being a miser just so you can die with millions isn't that much better...

"Living frugally" isn't what it used to be in the pain department. I have a Netflix subscription for one DVD and unlimited streaming instead of a $70 cable subscription (or an expensive antenna for my area), and while I made this choice to be "frugal" in the end I've actually been happier than I was with the cable. Do you need a smartphone with unlimited Internet? I can't speak for you, but I'm almost always within range of a computer and Wifi, and when I'm not I don't really need it. Does a new car bring you proportionate joy to the cost? It doesn't me, so mine are chosen to be relatively cheap to buy and operate, and I don't miss out on much I care about. (And I'm examining doing without my car; without going into my personal analysis it isn't a drop-dead win for my real numbers, but I'm looking at it. Note: I do not live in an area where I can trivially use public transportation.)

And so on. You don't really have to eschew the pleasures of the flesh entirely to be a "miser" nowadays; you can eat well (cooking yourself), drive adequately, be entertained for a reasonable price, etc, and still save enough money to retire comfortably. You do have to avoid credit card debt, not overcommit on your housing, and there's some tricks and issues (can you psychologically deal with having $10K+ in the bank without spending it, without relenting on the discipline?), but the days of actually facing the choice you outline are gone for most of the people who would be on HN in the first place.

Oh, recently internalized "trick": Take all "monthly fees" and mentally multiply by 12 to get the yearly cost, then treat that as the real cost. $24.95 a month for a service may sound reasonable; does $300 a year sound just as reasonable? I've been using this as part of my cell-phone upgrade resistance; there's a lot of ways I'd personally rather spend $300 than on a cell plan upgrade, up to and including not spending it at all. My Netflix savings is ($70 - $9) x 12 yearly, or $732/yr. My only regret is that I didn't do it about a year earlier!

Post reply on HN